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Protect Yourself From Investment Scams, Frauds and Swindlers

There were about thousand, if not million, Filipinos that had been victimized by scam investment programs, investment frauds and swindlers. One popular scam that had happened recently was the Aman Futures Investment which was said to be a typical Ponzi scheme. A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.



Here is a list of the popular scams and investment frauds that had flourished in the past leaving heartaches and damages to the Filipino investors and unaware citizens.

1. FRANCSWISS - FrancSwiss offered a 4.5% return on a minimum investment of $1,000. By the first week of July 2007, the program had been officially declared a scam as the website disappeared and investors stopped receiving payments.

2. PERFORMANCE INVESTMENTS PRODUCTS CORPORATION - PIPC was an online forex trading service that offered relatively higher yields on a minimum investment of US$40,000. Unlike other online investment scams, PIPC does not appear to be a Ponzi or pyramid scam. The program became embroiled in a scandal in July 2006 after its Singaporean owner went missing, allegedly taking with him majority of the company’s funds.

3. PHOENIXSURF - PhoenixSurf was an “autosurf” program in 2006 that promised to pay 120% return on an investment in just 8 days. The company’s business model was offering advertisement space to advertisers and requiring members to “browse” or “surf” the ads in order for the company to make money. Members earned high returns on their investment in exchange for “autosurfing” the ads. The company eventually folded up when it found itself unable to pay investors.

4. 12DAILYPRO - Like PhoenixSurf, 12DailyPro was an “autosurf” program that started in 2005 and offered a 12% daily return on invested funds for 12 days. The company closed down, with the owner said to have ran away with more than $500 million of investors’ money.

5. ROYAL MANCHESTER FIVE - Royal Manchester Five (RMF) was a currency-trading investment program that enticed investors with a guaranteed return of 4-5% every month. Minimum investment amount was P200,000 ($5,000). It victimized thousands of Filipinos, including local basketball players and popular celebrities.

7. LEGACY GROUP OF COMPANIES - The Legacy Group of Companies is composed of 13 banks plus several other pre-need firms owned by Albay mayor Celso de los Angeles. The banks offered “double your money” schemes which promised depositors a 100% return on their money after several years. The Bangko Sentral had warned depositors that this scheme may be illegal and, in late 2008, the pyramid collapsed and the Legacy banks filed for a bank holiday.

7. AMAN FUTURES - Aman Futures Group was an investment program that proliferated in the Visayas and Mindanao, offering investors outrageously high interest rates for their investment. It is said to have victimized more than 15,000 people, with around P12 billion of money involved. The scandal rocked the national government since some politicians of local government units are accused of using government money to invest in the said scam.

Let us learn from the past, we need to protect ourselves from investment scams and swindlers by understanding their tricks - most often they have these "get rich quick" schemes. One thing is we should beware offers that sound too good to be true. These cannot be true, especially those that offer once-in-a-lifetime opportunity to make a lot of money quickly.

Here are some investing tips that may help protect you and your investments:

1. Think, examine and diligently study the offer. Be careful of offers with high and fantastic earnings on your investments or some business opportunities.

2. If you come across any investment offer by phone, e-mail, flyers, newspaper ads, or directly by any person, or by any means, you must ask questions to protect yourself and your money by getting the following information:
  • Name of the person and the company making the offer
  • Address of both the person and the company
  • Phone number, particularly the landline. Do not accept cellular phone numbers, the owner can be hardly traced.
  • SEC registration as an investment taker. Please bear in mind of the following: 

    • SEC company registration does not grant authority to sell investment instruments such as securities, bonds, commercial papers, or similar financial instruments. Do not be tricked or tempted by offers of promissory notes or post-dated checks which will be issued in your favor to allegedly ensure the payment of earnings and reimbursement of your investments.
    • Only investment houses and financing companies with QB (quasi-banking) license and with SEC registered securities may offer to sell the same to more than 19 investors.
    • Only SEC registered persons (brokers/dealers/salesmen) may offer or sell SEC registered securities to the public.
3. If the person or the company is unwilling or hesitant to give any of the foregoing information or they have no SEC registration or appropriate license  to engaged in the activities cited above (#4-2 and #4-3) or does not give additional financial information about their license or not listed in the SEC website, do not deal with them. Report immediately to the SEC-CED  (Compliance Monitoring and Enforcement Department) and/or seek NBI or police assistance in case of an emergency situation.

 4. If the person claims to have QB license or SEC registered securities, get more information such as the number of investors, minimum placement, rate of return, etc., and check and verify the name of the company from the list of companies who may offer investments as posted in the SEC website.

Remember, an informed investor makes good investment decisions. Be wary of "get rich quick" investment schemes, safeguard your interest and get the latest materials on investment scams and swindlers.

Disclaimer : Opinions expressed in this article are that of the author and information provided are for general conceptual guidance for public information only and are not substitute for advice from qualified professional or an expert opinion. Contact support@cpadavao.com for more information and/or if you want to avail professional services from a qualified professional. This site accepts and publishes contributions from accountants and business professionals, especially articles that are of interest to the accountancy profession, in particular, and to the business community, in general. Please email your articles to publisher@cpadavao.com together with your bio and affiliations for publication in this website.


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About Vincent C. Perdiguez

Vincent is an accountant by profession. He is writing about accounting, business and the profession. He's been working as an accountant and auditor for small and medium businesses here in Davao City, Philippines. His present field of interest is on government and private accounting and processes, and audit. He is doing some freelance jobs focused on Quickbooks and Excel consulting. You can reach him through mobile at 0916-2764-585 (Globe).
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